SMEs, tech vendors scrabble for morsels of comfort in CSR

George Osborne left small business lobbyists spluttering today over the lack of an explicit commitment to helping SMEs in the Comprehensive Spending Review.

Meanwhile, tech vendors reacted with a flurry of pre-canned statements, mainly claiming that their products and services are just the thing to help hard-pressed public sector IT departments. Presumably none of them were involved in the projects that so inflated government spending in the first place.

The Federation of Small Businesses said the "missing link" in the CSR unveiled today was a Small Business Programme for Growth.

It said that small firms recognised the need to cut public spending, and welcomed plans to increase the number of adult apprenticeships, boost the low carbon economy and upgrade some national infrastructure.

But it argued there was no programme for growth, which would increase the tax base and help small firms grow and innovate. It called for an extension to the national insurance contributions holiday for smaller firms, a cut in VAT for the construction industry, and concentration of business support budgets on "micro businesses".

The Forum for Private Business added, "High tech industries – and the people that work in them – are extremely important for a strong economy in the future and it is good that funding for science is being ring-fenced." But, it warned, “these measures alone will not be enough to allow small businesses to substantially create employment in order to replace the 490,000 jobs that will be lost in the public sector”.

Meanwhile, IT vendors shot out their "comments" on Osborne's speech - some even before the chancellor took to his feet in the Commons.

Spooky security consultancy Detica unsurprisingly welcomed the increase in cyber security spending, which the government seems to prefer to traditional defence spending. MD Martin Sutherland said: "It is exactly right that cyber-crime should be treated as one of the nation’s greatest threats and that the Government is taking this opportunity to overhaul the UK’s approach to combating cyber-crime."

Bindi Bhullar of outsourcing giant HCL said: “Public sector departments need to look to alternate providers that can deliver a fresh approach to management and offer accountability through outcome-based pricing models. The next four years will be extremely challenging for managers, but by outsourcing operational workloads, they can deliver much greater efficiencies to public services over the next four years.”

Whether the government believes this to be the case is open to question. Consultants and mismanaged outsourcing projects are high on the list of public spending enemies, supposedly.

Security software vendor Sophos meanwhile suggested: "All areas of government could benefit by opening a dialogue with their vendors to find innovative ways of reducing transaction costs."

Or put another way, they should ditch the idea of using multiple suppliers. Sophos said: "Using one vendor to provide several services instead of three separate vendors, for example, not only takes advantage of economies of scale but also simplifies internal processes."

Presumably there is no advantage then to playing off multiple suppliers against one another to secure the best deal for taxpayers.

“When it comes to IT and telecoms, the private sector will easily make up the jobs lost in the public sector," MD Paul Winchester claimed. "The private sector job market is in rude health and the industry is big enough to take care of itself. There is no reason to imagine the pace of consolidation envisaged in the Budget will undermine the recovery." ®